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Micron Technology is expected to report earnings today and I've gotten a lot of questions asking what are my thoughts on this and do I believe this is going to be earnings well on today's episode I want to take a closer look at what is the main way Micron can be earnings and the kind of evidence we have right now that it might be heading that direction so let's take a closer look but before we go anywhere s at full.com hose and check out my special free newsletter at what the chip happened where you get daily semiconductor news for free ul Micron Technology sitting at 108 pre-market the stock is actually up uh about 1.5% sitting at $110 now year to say the stock has a high of 153 but we can see from that levels the stock is down roughly 30% now I do believe Micron has the ability to be expectations and to actually see a nice stock price increase after earnings only only if it does the following things correctly obviously earnings is always a 50/50 we can't know what's happening but right now the current evidence is as following informs of the memory Market memory is very important in in hbm which is used in AI accelerators AI accelerators continues to grow we continue to see more AI chips announced we kind of see the production of of AI chips increase which means in theory memory should be growing with it the other thing we are seeing is things like local AI being added to phones being added to more memory in graphics cards for your consumer laptops and your consumer desktops and being added to other Computing Edge Solutions so you're also seeing an increase in memory thanks to AI running on locally products as well so you're seeing a huge demand from AI in two main markets now to understand where micron's Revenue comes there's two main memory spaces there's Dam and Nan when we think of theam this is their biggest portion which made up about $5.3 billion out of the 7.7 billion last quarter which represented roughly 69% of total revenue love luckily for micron investors dram that's where that hbm comes from that's where all these other memory Solutions come for the AI locally space as well so if we do expect the AI market to continue to grow then we should be bullish on dram a quick quick disclosure I'm by no means a shareholder of Micron I just am uh semiconductor investor and I am seeing kind of the semiconductor landscape Through The Eyes of the AI space with companies like Nvidia so now that we understand what are some of the bullish cases what are kind of the revenue segments for micron I want to explain a little bit more why the dram Market is very important right now and it's kind of like a turning point compared to normal right because Dam and the memory space one thing that I've mentioned plenty of times it's it's a very commoditized product it's also a very cyclical product the reason it's commoditized is because this has heavy heavy competition until now but first let's kind of look at earnings expectations so for this current quarter a average estimates are about .77 on earnings per share the low estimates are $173 the high estimates are $1.96 I personally believe it is going to beat the average um the average estimate but it's not going to be it's not going to be anywhere near that high estimate so maybe somewhere around the $180 now if forms of revenue revenue is expected to be roughly $8.7 billion where the low estimate is very close to that at 8.3 the high estimate is at 8.9 I believe it's going to be closer to $8.8 billion again a nice be overall but what's really important is going to be guidance for the upcoming quarter for the upcoming quarter the high estimate is 9.5 billion and roughly 9 billion on average so for at minimum Micron is going to need to do at least 9 billion in guidance for next quarter and I think that is possible like I mentioned I do have a few screenshots here and in forms of the hbm market there's really only three manufacturers there's Samsung there's Micron and there's SK hinx the one leading the pack is SK hinx the one second and kind of grabbing market share is Micron then there is Samsung which unfortunately for Samsung shareholders is not doing so well in the hbm space so right now it's a two Market where Micron has a lot to grow because it is the number two player dominated by SK hyx now memory is used in everything in AI server so if you are bullish in AI you're bullish that hey look hbm is used on your CPU it's used on your GPU it's used on your accelerator it's used in other Solutions as well like your ipu and your dpu um which a lot of AI centers are have multiple multiple of these per racks so right now we can see this huge growth opportunity as the architecture of data centers continues to grow at intensive level now this is kind of a picture of a GPU right so this is kind of a GPU you have your GPU die and then through those die you also have kind of like your HPM stack this is your high bandwidth memory high bandwidth memory is pretty much a lot of the Rams tied together and for them to do this is actually a very special process so the great thing about this and remember just a quick backlog here dram makes up most of the company's total revenue over 2/3 closer to 70% of the total revenue comes from dram so here to make hbm you're actually stacking up a lot of dram dies together unfortunately unfortunately the process of this is very difficult at the moment but the yields are pretty low so if you might need four Dam dies in theory because of the yields you're actually using a lot more which is helping do the following first it's helping control the supply of dram right because if you're using multiple Dam to kind of get your great yields you're kind of reducing that Dam Supply that was going to go on phones that was going to go on on laptops and that was going to go everywhere else so HB is H is helping helping control Supply and because it's helping control Supply and since it is a kind of a bottleneck in the AI accelerator space and because there's only limited amount of players in this space it does allow for a stronger pricing power compared to most memory Solutions I mean I have a quote here that right now HPM takes about three times as many Wafers as standard products to produce the same number of bits in a given technology so in theory if you're going to create kind of uh same bits of the RAM and hbm you need three times more Wafers which again is helping control that Supply now as we look ahead and this is the CEO of Micron Technology as we look ahead into the 2026 time frame when we enter hbm 4 it will take even a bigger ratio and therefore when we look at managing our overall Supply that is a very important consideration at all and remember it's not just about Ai and DRM even though I haven't really talked about it much and I'm not going to talk about it much Nan is also one that can benefit from AI servers so overall I want to say for the market to continue to be bullish on Micron a few things need to happen first Micron needs to continue to win market share in the hbm market it needs to get that market share from SK hyx I know I have them somewhere here uh right here it needs to make sure that Samsung is still far ahead so Micron needs to continue to innovate and we need to get some strong guidance but right now at the end of the day the market is kind of like a probability game right now everything that we are hearing from the AI space is pointing to the direction that this can in fact happen now let's just kind of do one more thing before I close out today today's episode I just want to look at micron's PE ratio at the moment so micron's current PE ratio is pretty expensive at 159 forward which is the next 12 months is at 12.4 and forward two year forward one year which is two fiscal years from now is at 8.4 so Micron is definitely sitting at cheap values but remember the memory Market is very very cyclical hopefully hbm can kind of curve some of that cyclicality but I personally believe usually the time to buy memory companies it's when everything looks gloomy now things are looking a lot better so obviously there's a lot less reward available to you but I think right now there is a high possibility not a guaranteed that the hbm market can benefit Micron and we can see a nice run up after earnings personally I'm not buying I don't do any earnings gamble but if the stock does drop and go the opposite direction I think Micon will give us great buying opportunities so I personally am not playing the investing game I have plenty of stocks in the semiconductor market and so I get to be very very patient on when I get to add to any semiconductor space if we do this see the stock drop after earnings I personally believe that's a great buying opportunity and will load up depending on the earnings call which I would definitely cover so take care have a good day and see you next time
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